2012 Hormel Foods Corporate Responsibility Report

At Hormel Foods, our multifaceted supply chain includes suppliers of hogs, turkeys, ingredients, packaging materials and transportation. We recognize the crucial role of the supply chain in our ability to operate responsibly, and in 2011, we introduced our Supplier Responsibility Principles to our key suppliers.

We expect our suppliers to operate according to our ethical business practices. We have established Supplier Quality Management (SQM), which evaluates our suppliers based on quality, delivery, service, technology and price. Our ingredient suppliers are subject to additional measurements to further ensure the quality and food safety of our supply chain. In fiscal year 2012, we conducted 149 audits of our ingredient suppliers based on food safety standards that are recognized by the Global Food Safety Initiative (GFSI); if suppliers are found to be non-compliant, appropriate action is taken—up to and including termination of partnership. Suppliers that exceed our established standards are eligible for our annual Hormel Foods Spirit of Excellence Awards. In 2012, we awarded 59 suppliers for their performance.

In addition to ensuring our suppliers comply with the food safety standards recognized by the Global Food Safety Initiative (GFSI), an internationally recognized, third-party food safety management system,we make a concerted effort to give diverse companies such as women-owned and minority-owned businesses the opportunity to supply quality product options that meet our company’s growing business needs. As a result of our supplier diversity program, in fiscal year 2012, we purchased 21 percent of our resources from diverse businesses (small businesses, women-owned businesses and minority-owned businesses). Of these diverse businesses, 3 percent were women-owned or minority-owned businesses. This data includes the independent family-owned hog farmers.